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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lowes Companies Inc | NYSE:LOW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
3.42 | 1.49% | 233.00 | 238.15 | 231.98 | 233.58 | 1,834,731 | 00:03:33 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
North Carolina
|
|
56-0578072
|
|||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|||
|
|
|
|
|
|
1000 Lowe’s Blvd.
|
|
|
|
||
Mooresville,
|
|
North Carolina
|
|
28117
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|||
|
|
|
|
|
|
Registrant’s telephone number, including area code
|
|
(704)
|
758-1000
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.50 per share
|
LOW
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
CLASS
|
|
OUTSTANDING AT 11/29/2019
|
Common Stock, $0.50 par value
|
|
766,475,430
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|||||||
|
|
|
November 1, 2019
|
|
November 2, 2018
|
|
February 1, 2019
|
|||||||
Assets
|
|
|
|
|
|
|
|
|||||||
Current assets:
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
|
|
$
|
794
|
|
|
$
|
1,668
|
|
|
$
|
511
|
|
|
Short-term investments
|
|
|
127
|
|
|
208
|
|
|
218
|
|
||||
Merchandise inventory - net
|
|
|
13,716
|
|
|
12,365
|
|
|
12,561
|
|
||||
Other current assets
|
|
|
1,025
|
|
|
897
|
|
|
938
|
|
||||
Total current assets
|
|
|
15,662
|
|
|
15,138
|
|
|
14,228
|
|
||||
Property, less accumulated depreciation
|
|
|
18,371
|
|
|
18,923
|
|
|
18,432
|
|
||||
Operating lease right-of-use assets
|
|
|
3,873
|
|
|
—
|
|
|
—
|
|
||||
Long-term investments
|
|
|
363
|
|
|
290
|
|
|
256
|
|
||||
Deferred income taxes - net
|
|
|
479
|
|
|
285
|
|
|
294
|
|
||||
Goodwill
|
|
|
303
|
|
|
1,272
|
|
|
303
|
|
||||
Other assets
|
|
|
713
|
|
|
805
|
|
|
995
|
|
||||
Total assets
|
|
|
$
|
39,764
|
|
|
$
|
36,713
|
|
|
$
|
34,508
|
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|||||||
Current liabilities:
|
|
|
|
|
|
|
|
|||||||
Short-term borrowings
|
|
|
$
|
637
|
|
|
$
|
—
|
|
|
$
|
722
|
|
|
Current maturities of long-term debt
|
|
|
574
|
|
|
1,117
|
|
|
1,110
|
|
||||
Current operating lease liabilities
|
|
|
499
|
|
|
—
|
|
|
—
|
|
||||
Accounts payable
|
|
|
8,822
|
|
|
9,283
|
|
|
8,279
|
|
||||
Accrued compensation and employee benefits
|
|
|
779
|
|
|
806
|
|
|
662
|
|
||||
Deferred revenue
|
|
|
1,222
|
|
|
1,356
|
|
|
1,299
|
|
||||
Other current liabilities
|
|
|
2,530
|
|
|
2,507
|
|
|
2,425
|
|
||||
Total current liabilities
|
|
|
15,063
|
|
|
15,069
|
|
|
14,497
|
|
||||
Long-term debt, excluding current maturities
|
|
|
16,635
|
|
|
14,460
|
|
|
14,391
|
|
||||
Noncurrent operating lease liabilities
|
|
|
3,942
|
|
|
—
|
|
|
—
|
|
||||
Deferred revenue - extended protection plans
|
|
|
875
|
|
|
827
|
|
|
827
|
|
||||
Other liabilities
|
|
|
791
|
|
|
963
|
|
|
1,149
|
|
||||
Total liabilities
|
|
|
37,306
|
|
|
31,319
|
|
|
30,864
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Shareholders' equity:
|
|
|
|
|
|
|
|
|||||||
Preferred stock - $5 par value, none issued
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock - $0.50 par value;
|
|
|
|
|
|
|
|
|||||||
Shares issued and outstanding
|
|
|
|
|
|
|
|
|||||||
November 1, 2019
|
768
|
|
|
|
|
|
|
|
||||||
November 2, 2018
|
806
|
|
|
|
|
|
|
|
||||||
February 1, 2019
|
801
|
|
|
384
|
|
|
403
|
|
|
401
|
|
|||
Capital in excess of par value
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Retained earnings
|
|
|
2,238
|
|
|
5,156
|
|
|
3,452
|
|
||||
Accumulated other comprehensive loss
|
|
|
(164
|
)
|
|
(165
|
)
|
|
(209
|
)
|
||||
Total shareholders' equity
|
|
|
2,458
|
|
|
5,394
|
|
|
3,644
|
|
||||
Total liabilities and shareholders' equity
|
|
|
$
|
39,764
|
|
|
$
|
36,713
|
|
|
$
|
34,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
||||||||||||||||
Current Earnings
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
||||||||
Net sales
|
$
|
17,388
|
|
|
100.00
|
|
$
|
17,415
|
|
|
100.00
|
|
$
|
56,121
|
|
|
100.00
|
|
$
|
55,662
|
|
|
100.00
|
Cost of sales
|
11,748
|
|
|
67.56
|
|
12,038
|
|
|
69.12
|
|
38,159
|
|
|
67.99
|
|
37,653
|
|
|
67.64
|
||||
Gross margin
|
5,640
|
|
|
32.44
|
|
5,377
|
|
|
30.88
|
|
17,962
|
|
|
32.01
|
|
18,009
|
|
|
32.36
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
3,772
|
|
|
21.69
|
|
3,997
|
|
|
22.95
|
|
11,682
|
|
|
20.82
|
|
12,315
|
|
|
22.13
|
||||
Depreciation and amortization
|
310
|
|
|
1.79
|
|
423
|
|
|
2.43
|
|
924
|
|
|
1.65
|
|
1,108
|
|
|
1.99
|
||||
Operating income
|
1,558
|
|
|
8.96
|
|
957
|
|
|
5.50
|
|
5,356
|
|
|
9.54
|
|
4,586
|
|
|
8.24
|
||||
Interest - net
|
177
|
|
|
1.02
|
|
153
|
|
|
0.88
|
|
508
|
|
|
0.90
|
|
467
|
|
|
0.84
|
||||
Pre-tax earnings
|
1,381
|
|
|
7.94
|
|
804
|
|
|
4.62
|
|
4,848
|
|
|
8.64
|
|
4,119
|
|
|
7.40
|
||||
Income tax provision
|
332
|
|
|
1.90
|
|
175
|
|
|
1.01
|
|
1,077
|
|
|
1.92
|
|
981
|
|
|
1.76
|
||||
Net earnings
|
$
|
1,049
|
|
|
6.04
|
|
$
|
629
|
|
|
3.61
|
|
$
|
3,771
|
|
|
6.72
|
|
$
|
3,138
|
|
|
5.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - basic
|
769
|
|
|
|
|
806
|
|
|
|
|
782
|
|
|
|
|
815
|
|
|
|
||||
Basic earnings per common share
|
$
|
1.36
|
|
|
|
|
$
|
0.78
|
|
|
|
|
$
|
4.81
|
|
|
|
|
$
|
3.84
|
|
|
|
Weighted average common shares outstanding - diluted
|
770
|
|
|
|
|
807
|
|
|
|
|
783
|
|
|
|
|
816
|
|
|
|
||||
Diluted earnings per common share
|
$
|
1.36
|
|
|
|
|
$
|
0.78
|
|
|
|
|
$
|
4.80
|
|
|
|
|
$
|
3.83
|
|
|
|
Cash dividends per share
|
$
|
0.55
|
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
1.58
|
|
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
2,439
|
|
|
|
|
$
|
5,517
|
|
|
|
|
$
|
3,452
|
|
|
|
|
$
|
5,425
|
|
|
|
Cumulative effect of accounting change
|
—
|
|
|
|
|
—
|
|
|
|
|
(263
|
)
|
|
|
|
33
|
|
|
|
||||
Net earnings
|
1,049
|
|
|
|
|
629
|
|
|
|
|
3,771
|
|
|
|
|
3,138
|
|
|
|
||||
Cash dividends declared
|
(423
|
)
|
|
|
|
(387
|
)
|
|
|
|
(1,233
|
)
|
|
|
|
(1,115
|
)
|
|
|
||||
Share repurchases
|
(827
|
)
|
|
|
|
(603
|
)
|
|
|
|
(3,489
|
)
|
|
|
|
(2,325
|
)
|
|
|
||||
Balance at end of period
|
$
|
2,238
|
|
|
|
|
$
|
5,156
|
|
|
|
|
$
|
2,238
|
|
|
|
|
$
|
5,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
|||||||||||||||||||
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|
Amount
|
|
% Sales
|
|||||||||||
Net earnings
|
$
|
1,049
|
|
|
6.04
|
|
$
|
629
|
|
|
3.61
|
|
|
$
|
3,771
|
|
|
6.72
|
|
|
$
|
3,138
|
|
|
5.64
|
|
Foreign currency translation adjustments - net of tax
|
24
|
|
|
0.13
|
|
(21
|
)
|
|
(0.13
|
)
|
|
60
|
|
|
0.11
|
|
|
(176
|
)
|
|
(0.32
|
)
|
||||
Other
|
(1
|
)
|
|
—
|
|
(1
|
)
|
|
—
|
|
|
(15
|
)
|
|
(0.03
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Other comprehensive income/(loss)
|
23
|
|
|
0.13
|
|
(22
|
)
|
|
(0.13
|
)
|
|
45
|
|
|
0.08
|
|
|
(177
|
)
|
|
(0.32
|
)
|
||||
Comprehensive income
|
$
|
1,072
|
|
|
6.17
|
|
$
|
607
|
|
|
3.48
|
|
|
$
|
3,816
|
|
|
6.80
|
|
|
$
|
2,961
|
|
|
5.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended November 1, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess
of Par Value |
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Income/(Loss) |
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance August 2, 2019
|
776
|
|
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
2,439
|
|
|
$
|
(187
|
)
|
|
$
|
2,640
|
|
Net earnings
|
|
|
|
|
|
|
1,049
|
|
|
|
|
1,049
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
23
|
|
|
23
|
|
|||||||||
Cash dividends declared, $0.55 per share
|
|
|
|
|
|
|
(423
|
)
|
|
|
|
(423
|
)
|
|||||||||
Share-based payment expense
|
|
|
|
|
20
|
|
|
|
|
|
|
20
|
|
|||||||||
Repurchase of common stock
|
(8
|
)
|
|
(4
|
)
|
|
(27
|
)
|
|
(827
|
)
|
|
|
|
(858
|
)
|
||||||
Issuance of common stock under share-based payment plans
|
—
|
|
|
—
|
|
|
7
|
|
|
|
|
|
|
7
|
|
|||||||
Balance November 1, 2019
|
768
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
$
|
2,238
|
|
|
$
|
(164
|
)
|
|
$
|
2,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Nine Months Ended November 1, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess
of Par Value |
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Income/(Loss) |
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|||||||||||||
Balance February 1, 2019
|
801
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
3,452
|
|
|
$
|
(209
|
)
|
|
$
|
3,644
|
|
Cumulative effect of accounting change
|
|
|
|
|
|
|
(263
|
)
|
|
|
|
(263
|
)
|
|||||||||
Net earnings
|
|
|
|
|
|
|
3,771
|
|
|
|
|
3,771
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
45
|
|
|
45
|
|
|||||||||
Cash dividends declared, $1.58 per share
|
|
|
|
|
|
|
(1,233
|
)
|
|
|
|
(1,233
|
)
|
|||||||||
Share-based payment expense
|
|
|
|
|
72
|
|
|
|
|
|
|
72
|
|
|||||||||
Repurchase of common stock
|
(36
|
)
|
|
(18
|
)
|
|
(148
|
)
|
|
(3,489
|
)
|
|
|
|
(3,655
|
)
|
||||||
Issuance of common stock under share-based payment plans
|
3
|
|
|
1
|
|
|
76
|
|
|
|
|
|
|
77
|
|
|||||||
Balance November 1, 2019
|
768
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
$
|
2,238
|
|
|
$
|
(164
|
)
|
|
$
|
2,458
|
|
|
Three Months Ended November 2, 2018
|
|||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess
of Par Value |
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Income/(Loss) |
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance August 3, 2018
|
811
|
|
|
$
|
406
|
|
|
$
|
—
|
|
|
$
|
5,517
|
|
|
$
|
(142
|
)
|
|
$
|
5,781
|
|
Net earnings
|
|
|
|
|
|
|
629
|
|
|
|
|
629
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(23
|
)
|
|
(23
|
)
|
|||||||||
Cash dividends declared, $0.48 per share
|
|
|
|
|
|
|
(387
|
)
|
|
|
|
(387
|
)
|
|||||||||
Share-based payment expense
|
|
|
|
|
15
|
|
|
|
|
|
|
15
|
|
|||||||||
Repurchase of common stock
|
(6
|
)
|
|
(3
|
)
|
|
(38
|
)
|
|
(603
|
)
|
|
|
|
(644
|
)
|
||||||
Issuance of common stock under share-based payment plans
|
1
|
|
|
—
|
|
|
23
|
|
|
|
|
|
|
23
|
|
|||||||
Balance November 2, 2018
|
806
|
|
|
$
|
403
|
|
|
$
|
—
|
|
|
$
|
5,156
|
|
|
$
|
(165
|
)
|
|
$
|
5,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Nine Months Ended November 2, 2018
|
|||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess
of Par Value |
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Income/(Loss) |
|
Total Shareholders’ Equity
|
|||||||||||||
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|||||||||||||
Balance February 2, 2018
|
830
|
|
|
$
|
415
|
|
|
$
|
22
|
|
|
$
|
5,425
|
|
|
$
|
11
|
|
|
$
|
5,873
|
|
Cumulative effect of accounting change
|
|
|
|
|
|
|
33
|
|
|
|
|
33
|
|
|||||||||
Net earnings
|
|
|
|
|
|
|
3,138
|
|
|
|
|
3,138
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(176
|
)
|
|
(176
|
)
|
|||||||||
Cash dividends declared, $1.37 per share
|
|
|
|
|
|
|
(1,115
|
)
|
|
|
|
(1,115
|
)
|
|||||||||
Share-based payment expense
|
|
|
|
|
77
|
|
|
|
|
|
|
77
|
|
|||||||||
Repurchase of common stock
|
(26
|
)
|
|
(13
|
)
|
|
(170
|
)
|
|
(2,325
|
)
|
|
|
|
(2,508
|
)
|
||||||
Issuance of common stock under share-based payment plans
|
2
|
|
|
1
|
|
|
71
|
|
|
|
|
|
|
72
|
|
|||||||
Balance November 2, 2018
|
806
|
|
|
$
|
403
|
|
|
$
|
—
|
|
|
$
|
5,156
|
|
|
$
|
(165
|
)
|
|
$
|
5,394
|
|
|
Nine Months Ended
|
||||||
|
November 1, 2019
|
|
November 2, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
3,771
|
|
|
$
|
3,138
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,029
|
|
|
1,206
|
|
||
Noncash lease expense
|
341
|
|
|
—
|
|
||
Deferred income taxes
|
(88
|
)
|
|
(139
|
)
|
||
Loss on property and other assets - net
|
93
|
|
|
400
|
|
||
Loss on cost method and equity method investments
|
12
|
|
|
6
|
|
||
Share-based payment expense
|
75
|
|
|
79
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Merchandise inventory - net
|
(1,129
|
)
|
|
(1,030
|
)
|
||
Other operating assets
|
(108
|
)
|
|
(94
|
)
|
||
Accounts payable
|
523
|
|
|
2,708
|
|
||
Other operating liabilities
|
(408
|
)
|
|
524
|
|
||
Net cash provided by operating activities
|
4,111
|
|
|
6,798
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investments
|
(563
|
)
|
|
(1,298
|
)
|
||
Proceeds from sale/maturity of investments
|
556
|
|
|
1,309
|
|
||
Capital expenditures
|
(927
|
)
|
|
(846
|
)
|
||
Proceeds from sale of property and other long-term assets
|
71
|
|
|
50
|
|
||
Other - net
|
—
|
|
|
(3
|
)
|
||
Net cash used in investing activities
|
(863
|
)
|
|
(788
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Net change in short-term borrowings
|
(85
|
)
|
|
(1,137
|
)
|
||
Net proceeds from issuance of long-term debt
|
2,972
|
|
|
—
|
|
||
Repayment of long-term debt
|
(1,092
|
)
|
|
(288
|
)
|
||
Proceeds from issuance of common stock under share-based payment plans
|
78
|
|
|
73
|
|
||
Cash dividend payments
|
(1,195
|
)
|
|
(1,068
|
)
|
||
Repurchase of common stock
|
(3,649
|
)
|
|
(2,498
|
)
|
||
Other - net
|
(7
|
)
|
|
(3
|
)
|
||
Net cash used in financing activities
|
(2,978
|
)
|
|
(4,921
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
1
|
|
|
(9
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents, including cash classified within current assets
held for sale
|
271
|
|
|
1,080
|
|
||
Less: Net decrease in cash classified within current assets held for sale
|
12
|
|
|
—
|
|
||
Net increase in cash and cash equivalents
|
283
|
|
|
1,080
|
|
||
Cash and cash equivalents, beginning of period
|
511
|
|
|
588
|
|
||
Cash and cash equivalents, end of period
|
$
|
794
|
|
|
$
|
1,668
|
|
|
|
|
|
Leases
(In millions)
|
Classification
|
November 1, 2019
|
||
Assets
|
|
|
||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
3,873
|
|
Finance lease assets
|
Property, less accumulated depreciation 1
|
403
|
|
|
Total lease assets
|
|
4,276
|
|
|
|
|
|
||
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Current operating lease liabilities
|
499
|
|
|
Finance
|
Current maturities of long-term debt
|
49
|
|
|
Noncurrent
|
|
|
||
Operating
|
Noncurrent operating lease liabilities
|
3,942
|
|
|
Finance
|
Long-term debt, excluding current maturities
|
481
|
|
|
Total lease liabilities
|
|
$
|
4,971
|
|
1
|
Finance lease assets are recorded net of accumulated amortization of $27 million as of November 1, 2019.
|
Lease Cost
(In millions)
|
Three Months Ended November 1, 2019
|
Nine Months Ended November 1, 2019
|
||||
Finance lease cost
|
|
|
||||
Amortization of leased assets
|
$
|
11
|
|
$
|
28
|
|
Interest on lease liabilities
|
7
|
|
21
|
|
||
Operating lease cost 1
|
185
|
|
524
|
|
||
Total lease cost
|
$
|
203
|
|
$
|
573
|
|
1
|
Includes short-term leases, variable lease costs, and sublease income, which are immaterial.
|
Maturity of lease liabilities
(In millions)
|
Operating Leases 1
|
Finance
Leases 2
|
Total
|
||||||
2019
|
$
|
124
|
|
$
|
15
|
|
$
|
139
|
|
2020
|
668
|
|
78
|
|
746
|
|
|||
2021
|
652
|
|
77
|
|
729
|
|
|||
2022
|
661
|
|
80
|
|
741
|
|
|||
2023
|
571
|
|
75
|
|
646
|
|
|||
After 2023
|
3,006
|
|
381
|
|
3,387
|
|
|||
Total lease payments
|
5,682
|
|
706
|
|
6,388
|
|
|||
Less: interest 3
|
(1,241
|
)
|
(176
|
)
|
(1,417
|
)
|
|||
Present value of lease liabilities 4
|
$
|
4,441
|
|
$
|
530
|
|
$
|
4,971
|
|
1
|
Operating lease payments include $249 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $299 million of minimum lease payments for leases signed but not yet commenced.
|
2
|
Finance lease payments include $11 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $233 million of minimum lease payments for leases signed but not yet commenced.
|
3
|
Calculated using the lease-specific incremental borrowing rate.
|
4
|
Includes the current portion of $499 million for operating leases and $49 million for finance leases.
|
Lease Term and Discount Rate
|
November 1, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
Operating leases
|
10.64
|
|
Finance leases
|
10.00
|
|
Weighted-average discount rate
|
|
|
Operating leases
|
4.26
|
%
|
Finance leases
|
6.42
|
%
|
Other Information
(In millions)
|
Nine Months Ended November 1, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows used for operating leases
|
$
|
629
|
|
Operating cash flows used for finance leases
|
22
|
|
|
Financing cash flows used for finance leases
|
37
|
|
|
Leased assets obtained in exchange for new finance lease liabilities
|
156
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
374
|
|
|
February 1, 2019
|
||||||||
Fiscal Year
(In millions)
|
Operating Leases
|
|
Capitalized Lease Obligations
|
|
Total
|
|
|||
2019
|
$
|
595
|
|
$
|
133
|
|
$
|
728
|
|
2020
|
605
|
|
87
|
|
692
|
|
|||
2021
|
564
|
|
90
|
|
654
|
|
|||
2022
|
519
|
|
87
|
|
606
|
|
|||
2023
|
473
|
|
86
|
|
559
|
|
|||
Later years
|
2,609
|
|
783
|
|
3,392
|
|
|||
Total minimum lease payments
|
$
|
5,365
|
|
$
|
1,266
|
|
$
|
6,631
|
|
Less amount representing interest
|
|
(492
|
)
|
|
|||||
Present value of minimum lease payments
|
|
774
|
|
|
|||||
Less current maturities
|
|
(65
|
)
|
|
|||||
Present value of minimum lease payments, less current maturities
|
|
$
|
709
|
|
|
(In millions)
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
|||||||||
Products
|
$
|
16,379
|
|
|
$
|
16,293
|
|
|
$
|
53,259
|
|
|
$
|
52,527
|
|
Services
|
545
|
|
|
665
|
|
|
1,690
|
|
|
1,999
|
|
||||
Other
|
464
|
|
|
457
|
|
|
1,172
|
|
|
1,136
|
|
||||
Net sales
|
$
|
17,388
|
|
|
$
|
17,415
|
|
|
$
|
56,121
|
|
|
$
|
55,662
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
||||||||||||||||
(In millions)
|
Total Sales
|
|
%
|
|
Total Sales
|
|
%
|
|
Total Sales
|
|
%
|
|
Total Sales
|
|
%
|
||||||||
Home Décor ¹
|
$
|
6,374
|
|
|
37
|
|
$
|
6,230
|
|
|
36
|
|
$
|
19,639
|
|
|
35
|
|
$
|
19,239
|
|
|
35
|
Building Products ²
|
5,961
|
|
|
34
|
|
5,939
|
|
|
34
|
|
17,865
|
|
|
32
|
|
17,913
|
|
|
32
|
||||
Hardlines ³
|
4,515
|
|
|
26
|
|
4,399
|
|
|
25
|
|
17,134
|
|
|
30
|
|
16,392
|
|
|
29
|
||||
Other
|
538
|
|
|
3
|
|
847
|
|
|
5
|
|
1,483
|
|
|
3
|
|
2,118
|
|
|
4
|
||||
Total
|
$
|
17,388
|
|
|
100
|
|
$
|
17,415
|
|
|
100
|
|
$
|
56,121
|
|
|
100
|
|
$
|
55,662
|
|
|
100
|
1
|
Home Décor includes the following product categories: Appliances, Décor, Flooring, Kitchens & Bath, and Paint
|
2
|
Building Products includes the following product categories: Lighting, Lumber & Building Materials, Millwork, and Rough Plumbing & Electrical
|
3
|
Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools
|
(In millions)
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
|||||||||
United States
|
$
|
16,131
|
|
|
$
|
15,991
|
|
|
$
|
52,225
|
|
|
$
|
51,319
|
|
International
|
1,257
|
|
|
1,424
|
|
|
3,896
|
|
|
4,343
|
|
||||
Net Sales
|
$
|
17,388
|
|
|
$
|
17,415
|
|
|
$
|
56,121
|
|
|
$
|
55,662
|
|
•
|
Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
|
•
|
Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities
|
|
|
|
Fair Value Measurements at
|
||||||||||
(In millions)
|
Measurement Level
|
|
November 1, 2019
|
|
November 2, 2018
|
|
February 1, 2019
|
||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||
Money market funds
|
Level 1
|
|
$
|
83
|
|
|
$
|
181
|
|
|
$
|
207
|
|
Agency securities
|
Level 2
|
|
19
|
|
|
10
|
|
|
10
|
|
|||
U.S. Treasury securities
|
Level 1
|
|
13
|
|
|
—
|
|
|
—
|
|
|||
Corporate debt securities
|
Level 2
|
|
12
|
|
|
—
|
|
|
1
|
|
|||
Certificates of deposit
|
Level 1
|
|
—
|
|
|
17
|
|
|
—
|
|
|||
Total short-term investments
|
|
|
$
|
127
|
|
|
$
|
208
|
|
|
$
|
218
|
|
Long-term investments:
|
|
|
|
|
|
|
|
||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||
U.S. Treasury securities
|
Level 1
|
|
$
|
258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
Level 2
|
|
75
|
|
|
224
|
|
|
191
|
|
|||
Agency securities
|
Level 2
|
|
30
|
|
|
66
|
|
|
65
|
|
|||
Total long-term investments
|
|
|
$
|
363
|
|
|
$
|
290
|
|
|
$
|
256
|
|
|
Fair Value Measurements
|
|
|
Impairment Losses
|
|||||||
(In millions)
|
November 1, 2019
|
|
|
Three Months Ended November 1, 2019
|
|
|
Nine Months Ended November 1, 2019
|
|
|||
Assets-held-for-use:
|
|
|
|
|
|
||||||
Operating locations
|
$
|
46
|
|
|
$
|
53
|
|
|
$
|
61
|
|
Total
|
$
|
46
|
|
|
$
|
53
|
|
|
$
|
61
|
|
|
Fair Value Measurements
|
|
|
Impairment Losses
|
|||||||
(In millions)
|
November 2, 2018
|
|
|
Three Months Ended November 2, 2018
|
|
|
Nine Months Ended November 2, 2018
|
|
|||
Assets-held-for-use:
|
|
|
|
|
|
||||||
Operating locations
|
$
|
473
|
|
|
$
|
112
|
|
|
$
|
329
|
|
Total
|
$
|
473
|
|
|
$
|
112
|
|
|
$
|
329
|
|
|
November 1, 2019
|
|
November 2, 2018
|
|
February 1, 2019
|
||||||||||||||||||
(In millions)
|
Carrying Amount
|
|
|
Fair Value
|
|
|
Carrying Amount
|
|
|
Fair Value
|
|
|
Carrying Amount
|
|
|
Fair Value
|
|
||||||
Unsecured notes (Level 1)
|
$
|
16,646
|
|
|
$
|
18,184
|
|
|
$
|
14,718
|
|
|
$
|
14,430
|
|
|
$
|
14,721
|
|
|
$
|
14,473
|
|
Mortgage notes (Level 2)
|
5
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
||||||
Long-term debt (excluding finance and capitalized lease obligations)
|
$
|
16,651
|
|
|
$
|
18,189
|
|
|
$
|
14,724
|
|
|
$
|
14,436
|
|
|
$
|
14,727
|
|
|
$
|
14,479
|
|
|
Costs Incurred
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative Amount
|
||||||
(In millions)
|
November 1, 2019
|
|
November 1, 2019
|
|
November 1, 2019
|
||||||
Long-lived asset impairment
|
$
|
53
|
|
|
$
|
53
|
|
|
$
|
53
|
|
Total
|
$
|
53
|
|
|
$
|
53
|
|
|
$
|
53
|
|
|
Costs Incurred
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative Amount
|
||||||
(In millions)
|
November 2, 2018
|
|
November 2, 2018
|
|
November 1, 2019
|
||||||
Long-lived asset impairment
|
$
|
—
|
|
|
$
|
206
|
|
|
$
|
206
|
|
Accelerated depreciation and amortization
|
103
|
|
|
103
|
|
|
103
|
|
|||
Discontinued project write-offs
|
—
|
|
|
24
|
|
|
24
|
|
|||
Severance costs
|
11
|
|
|
11
|
|
|
11
|
|
|||
Lease obligation costs for closed locations
|
9
|
|
|
9
|
|
|
217
|
|
|||
Total
|
$
|
123
|
|
|
$
|
353
|
|
|
$
|
561
|
|
|
Costs Incurred
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative Amount
|
||||||
(In millions)
|
November 2, 2018
|
|
November 2, 2018
|
|
November 1, 2019
|
||||||
Long-lived asset impairment
|
$
|
90
|
|
|
$
|
90
|
|
|
$
|
90
|
|
Severance costs
|
21
|
|
|
21
|
|
|
32
|
|
|||
Discontinued project write-offs
|
10
|
|
|
10
|
|
|
10
|
|
|||
Lease obligation costs for closed locations
|
—
|
|
|
—
|
|
|
89
|
|
|||
Accelerated depreciation and amortization
|
—
|
|
|
—
|
|
|
50
|
|
|||
Total
|
$
|
121
|
|
|
$
|
121
|
|
|
$
|
271
|
|
|
Costs Incurred
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative Amount
|
||||||
(In millions)
|
November 2, 2018
|
|
November 2, 2018
|
|
November 1, 2019
|
||||||
Long-lived asset impairment
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Inventory adjustments to net realizable value
|
5
|
|
|
5
|
|
|
7
|
|
|||
Other closing costs
|
—
|
|
|
—
|
|
|
27
|
|
|||
Severance costs
|
—
|
|
|
—
|
|
|
16
|
|
|||
Total
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
59
|
|
|
Costs Incurred
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative Amount
|
||||||
(In millions)
|
November 2, 2018
|
|
November 2, 2018
|
|
November 1, 2019
|
||||||
Long-lived asset impairment
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
244
|
|
Total
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
244
|
|
Issue Date
|
|
Principal Amount (in millions)
|
|
Maturity Date
|
|
Fixed vs. Floating
|
|
Interest Rate
|
|
Discount (in millions)
|
||||
April 5, 2019
|
|
$
|
1,500
|
|
|
April 2029
|
|
Fixed
|
|
3.650%
|
|
$
|
9
|
|
April 5, 2019
|
|
$
|
1,500
|
|
|
April 2049
|
|
Fixed
|
|
4.550%
|
|
$
|
19
|
|
|
Three Months Ended
|
||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
||||||||||
(In millions)
|
Shares
|
|
|
Cost 1
|
|
|
Shares
|
|
|
Cost 1
|
|
||
Share repurchase program
|
7.7
|
|
|
$
|
835
|
|
|
5.7
|
|
|
$
|
620
|
|
Shares withheld from employees
|
0.2
|
|
|
23
|
|
|
0.2
|
|
|
25
|
|
||
Total share repurchases
|
7.9
|
|
|
$
|
858
|
|
|
5.9
|
|
|
$
|
645
|
|
1
|
Reductions of $827 million and $603 million were recorded to retained earnings, after capital in excess of par value was depleted, for the three months ended November 1, 2019 and November 2, 2018, respectively.
|
|
Nine Months Ended
|
||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
||||||||||
(In millions)
|
Shares
|
|
|
Cost 2
|
|
|
Shares
|
|
|
Cost 2
|
|
||
Share repurchase program
|
35.3
|
|
|
$
|
3,618
|
|
|
25.9
|
|
|
$
|
2,470
|
|
Shares withheld from employees
|
0.3
|
|
|
36
|
|
|
0.3
|
|
|
38
|
|
||
Total share repurchases
|
35.6
|
|
|
$
|
3,654
|
|
|
26.2
|
|
|
$
|
2,508
|
|
2
|
Reductions of $3.5 billion and $2.3 billion were recorded to retained earnings, after capital in excess of par value was depleted, for the nine months ended November 1, 2019 and November 2, 2018, respectively.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions, except per share data)
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
1,049
|
|
|
$
|
629
|
|
|
$
|
3,771
|
|
|
$
|
3,138
|
|
Less: Net earnings allocable to participating securities
|
(3
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|
(10
|
)
|
||||
Net earnings allocable to common shares, basic
|
$
|
1,046
|
|
|
$
|
628
|
|
|
$
|
3,760
|
|
|
$
|
3,128
|
|
Weighted-average common shares outstanding
|
769
|
|
|
806
|
|
|
782
|
|
|
815
|
|
||||
Basic earnings per common share
|
$
|
1.36
|
|
|
$
|
0.78
|
|
|
$
|
4.81
|
|
|
$
|
3.84
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
$
|
1,049
|
|
|
$
|
629
|
|
|
$
|
3,771
|
|
|
$
|
3,138
|
|
Less: Net earnings allocable to participating securities
|
(3
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|
(10
|
)
|
||||
Net earnings allocable to common shares, diluted
|
$
|
1,046
|
|
|
$
|
628
|
|
|
$
|
3,760
|
|
|
$
|
3,128
|
|
Weighted-average common shares outstanding
|
769
|
|
|
806
|
|
|
782
|
|
|
815
|
|
||||
Dilutive effect of non-participating share-based awards
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Weighted-average common shares, as adjusted
|
770
|
|
|
807
|
|
|
783
|
|
|
816
|
|
||||
Diluted earnings per common share
|
$
|
1.36
|
|
|
$
|
0.78
|
|
|
$
|
4.80
|
|
|
$
|
3.83
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
||||||||
Long-term debt
|
$
|
171
|
|
|
$
|
145
|
|
|
$
|
498
|
|
|
$
|
437
|
|
Finance lease obligations
|
7
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Capitalized lease obligations
|
—
|
|
|
15
|
|
|
—
|
|
|
44
|
|
||||
Interest income
|
(5
|
)
|
|
(9
|
)
|
|
(24
|
)
|
|
(21
|
)
|
||||
Interest capitalized
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Interest on tax uncertainties
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Other
|
4
|
|
|
2
|
|
|
16
|
|
|
9
|
|
||||
Interest - net
|
$
|
177
|
|
|
$
|
153
|
|
|
$
|
508
|
|
|
$
|
467
|
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Cash paid for interest, net of amount capitalized
|
$
|
647
|
|
|
$
|
555
|
|
Cash paid for income taxes - net
|
$
|
1,029
|
|
|
$
|
1,069
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Non-cash property acquisitions 1
|
$
|
251
|
|
|
$
|
42
|
|
Cash dividends declared but not paid
|
$
|
423
|
|
|
$
|
387
|
|
•
|
Executive Overview
|
•
|
Operations
|
•
|
Financial Condition, Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Contractual Obligations and Commercial Commitments
|
•
|
Critical Accounting Policies and Estimates
|
|
Three Months Ended
|
|
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Period1
|
|
|
Percentage Increase / (Decrease) in Dollar Amounts from Prior Period1
|
|
||||
|
November 1, 2019
|
|
November 2, 2018
|
|
2019 vs. 2018
|
|
|
2019 vs. 2018
|
|
||
Net sales
|
100.00
|
%
|
|
100.00
|
%
|
|
N/A
|
|
|
(0.2
|
)%
|
Gross margin
|
32.44
|
|
|
30.88
|
|
|
156
|
|
|
4.9
|
|
Expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
21.69
|
|
|
22.95
|
|
|
(126
|
)
|
|
(5.6
|
)
|
Depreciation and amortization
|
1.79
|
|
|
2.43
|
|
|
(64
|
)
|
|
(26.7
|
)
|
Operating income
|
8.96
|
|
|
5.50
|
|
|
346
|
|
|
62.7
|
|
Interest - net
|
1.02
|
|
|
0.88
|
|
|
14
|
|
|
14.9
|
|
Pre-tax earnings
|
7.94
|
|
|
4.62
|
|
|
332
|
|
|
71.8
|
|
Income tax provision
|
1.90
|
|
|
1.01
|
|
|
89
|
|
|
89.7
|
|
Net earnings
|
6.04
|
%
|
|
3.61
|
%
|
|
243
|
|
|
66.8
|
%
|
|
Nine Months Ended
|
|
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Period1
|
|
|
Percentage Increase / (Decrease) in Dollar Amounts from Prior Period1
|
|
||||
|
November 1, 2019
|
|
November 2, 2018
|
|
2019 vs. 2018
|
|
|
2019 vs. 2018
|
|
||
Net sales
|
100.00
|
%
|
|
100.00
|
%
|
|
N/A
|
|
|
0.8
|
%
|
Gross margin
|
32.01
|
|
|
32.36
|
|
|
(35
|
)
|
|
(0.3
|
)
|
Expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
20.82
|
|
|
22.13
|
|
|
(131
|
)
|
|
(5.1
|
)
|
Depreciation and amortization
|
1.65
|
|
|
1.99
|
|
|
(34
|
)
|
|
(16.6
|
)
|
Operating income
|
9.54
|
|
|
8.24
|
|
|
130
|
|
|
16.8
|
|
Interest - net
|
0.90
|
|
|
0.84
|
|
|
6
|
|
|
8.8
|
|
Pre-tax earnings
|
8.64
|
|
|
7.40
|
|
|
124
|
|
|
17.7
|
|
Income tax provision
|
1.92
|
|
|
1.76
|
|
|
16
|
|
|
9.7
|
|
Net earnings
|
6.72
|
%
|
|
5.64
|
%
|
|
108
|
|
|
20.2
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Other Metrics
|
November 1, 2019
|
|
November 2, 2018
|
|
November 1, 2019
|
|
November 2, 2018
|
||||||||
Comparable sales increase 1
|
2.2
|
%
|
|
1.5
|
%
|
|
2.7
|
%
|
|
2.6
|
%
|
||||
Total customer transactions (in millions)
|
221
|
|
|
229
|
|
|
720
|
|
|
738
|
|
||||
Average ticket 2
|
$
|
78.71
|
|
|
$
|
75.89
|
|
|
$
|
77.95
|
|
|
$
|
75.47
|
|
At end of period:
|
|
|
|
|
|
|
|
||||||||
Number of stores
|
2,004
|
|
|
2,133
|
|
|
|
|
|
||||||
Sales floor square feet (in millions)
|
209
|
|
|
215
|
|
|
|
|
|
||||||
Average store size selling square feet (in thousands) 3
|
104
|
|
|
101
|
|
|
|
|
|
||||||
Net earnings to average debt and equity 4
|
11.7
|
%
|
|
14.3
|
%
|
|
|
|
|
||||||
Return on invested capital 4
|
14.2
|
%
|
|
16.7
|
%
|
|
|
|
|
1
|
A comparable location is defined as a location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Acquired locations are included in the comparable sales calculation beginning in the first full month following the first anniversary of the date of the acquisition. Comparable sales include online sales, which positively impacted third quarter fiscal 2019 comparable sales by approximately 15 basis points and year-to-date fiscal 2019 comparable sales by approximately 30 basis points. The comparable store sales calculation included in the preceding table was calculated using comparable 13-week and 26-week periods.
|
2
|
Average ticket is defined as net sales divided by the total number of customer transactions.
|
3
|
Average store size selling square feet is defined as sales floor square feet divided by the number of stores open at the end of the period. The average Lowe’s-branded home improvement store has approximately 112,000 square feet of retail selling space.
|
4
|
Return on invested capital is calculated using a non-GAAP financial measure. Net earnings to average debt and equity is the most comparable GAAP ratio. See below for additional information and reconciliations of non-GAAP measures.
|
•
|
The Company recorded $123 million of pre-tax charges, consisting of accelerated depreciation and amortization, severance, and lease obligations related to the decision to close all Orchard locations (Orchard Supply Hardware charges).
|
•
|
The Company recognized $121 million of pre-tax charges, consisting of long-lived asset impairment and severance associated with the decision to close 20 U.S. stores and 31 stores and other locations in Canada (U.S. and Canada closing charges).
|
•
|
The Company recognized $22 million of pre-tax charges, consisting of long-lived asset impairments, associated with its Mexico retail operations (Mexico impairment charge).
|
•
|
The Company recognized $14 million of pre-tax charges associated with the exit of certain immaterial non-core activities within its U.S. home improvement business (Non-core activities charge).
|
|
Three Months Ended
|
||||||||||||||||||
|
November 1, 2019
|
|
November 2, 2018
|
||||||||||||||||
|
Pre-Tax Earnings
|
|
Tax
|
|
Net Earnings
|
|
Pre-Tax Earnings
|
|
Tax
|
|
Net Earnings
|
||||||||
Diluted earnings per share, as reported
|
|
|
|
|
$
|
1.36
|
|
|
|
|
|
|
$
|
0.78
|
|
||||
Non-GAAP adjustments - per share impacts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2019 Canada restructuring
|
0.07
|
|
|
(0.02
|
)
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Orchard Supply Hardware charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.15
|
|
|
(0.03
|
)
|
|
0.12
|
|
||
U.S. and Canada closing charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.15
|
|
|
(0.04
|
)
|
|
0.11
|
|
||
Mexico impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
||
Non-core activities charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
(0.01
|
)
|
|
0.01
|
|
||
Adjusted diluted earnings per share
|
|
|
|
|
$
|
1.41
|
|
|
|
|
|
|
$
|
1.04
|
|
|
For the Periods Ended
|
||||||
(In millions, except percentage data)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Calculation of Return on Invested Capital
|
|
|
|
||||
Numerator
|
|
|
|
||||
Net Earnings
|
$
|
2,947
|
|
|
$
|
3,692
|
|
Plus:
|
|
|
|
||||
Interest expense - net
|
665
|
|
|
620
|
|
||
Operating lease interest
|
186
|
|
|
214
|
|
||
Provision for income taxes
|
1,177
|
|
|
1,371
|
|
||
Lease adjusted net operating profit
|
4,975
|
|
|
5,897
|
|
||
Less:
|
|
|
|
||||
Income tax adjustment 1
|
1,414
|
|
|
1,597
|
|
||
Lease adjusted net operating profit after tax
|
$
|
3,561
|
|
|
$
|
4,300
|
|
Denominator
|
|
|
|
||||
Average debt and equity 2
|
$
|
25,106
|
|
|
$
|
25,734
|
|
Net earnings to average debt and equity
|
11.7
|
%
|
|
14.3
|
%
|
||
Return on invested capital
|
14.2
|
%
|
|
16.7
|
%
|
1
|
Income tax adjustment is defined as net operating profit multiplied by the effective tax rate, which was 28.4% and 27.1% for the periods ended November 1, 2019 and November 2, 2018, respectively.
|
2
|
Average debt and equity is defined as average current year and prior year ending debt, including current maturities, short-term borrowings, and operating lease liabilities, plus the average current year and prior year ending total equity.
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Net cash provided by operating activities
|
$
|
4,111
|
|
|
$
|
6,798
|
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Net cash used in investing activities
|
$
|
(863
|
)
|
|
$
|
(788
|
)
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Existing store investments 1
|
$
|
694
|
|
|
$
|
490
|
|
Strategic initiatives 2
|
127
|
|
|
145
|
|
||
New stores and international 3
|
106
|
|
|
211
|
|
||
Total capital expenditures
|
$
|
927
|
|
|
$
|
846
|
|
1
|
Includes merchandising resets, facility repairs, replacements of IT and store equipment, among other specific efforts.
|
2
|
Represents investments related to our strategic focus areas aimed at improving customers’ experience and driving improved performance in the near and long term.
|
3
|
Represents expenditures primarily related to land purchases, buildings, and personal property for new store projects as well as expenditures related to our international operations.
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Net cash used in financing activities
|
$
|
(2,978
|
)
|
|
$
|
(4,921
|
)
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Net proceeds from issuance of long-term debt
|
$
|
2,972
|
|
|
$
|
—
|
|
Repayment of long-term debt
|
$
|
(1,092
|
)
|
|
$
|
(288
|
)
|
|
Nine Months Ended
|
||||||
(In millions, except for interest rate data)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Net change in short-term borrowings
|
$
|
(85
|
)
|
|
$
|
(1,137
|
)
|
Amount outstanding at quarter-end
|
$
|
637
|
|
|
$
|
—
|
|
Maximum amount outstanding at any month-end
|
$
|
1,189
|
|
|
$
|
892
|
|
Weighted-average interest rate of short-term borrowings outstanding
|
1.97
|
%
|
|
—
|
%
|
|
Nine Months Ended
|
||||||
(In millions, except per share data)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Total amount paid for share repurchases
|
$
|
3,649
|
|
|
$
|
2,498
|
|
Total number of shares repurchased
|
35.6
|
|
|
26.1
|
|
||
Average price paid per share
|
$
|
102.59
|
|
|
$
|
95.67
|
|
|
Nine Months Ended
|
||||||
(In millions, except per share data)
|
November 1, 2019
|
|
November 2, 2018
|
||||
Total cash dividend payments
|
$
|
1,195
|
|
|
$
|
1,068
|
|
Dividends paid per share
|
$
|
1.51
|
|
|
$
|
1.30
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
Less Than
|
|
1-3
|
|
4-5
|
|
After 5
|
||||||||||
(In millions)
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
Years
|
||||||||||
Long-term debt (principal amounts, excluding discounts and debt issuance costs)
|
$
|
16,813
|
|
|
$
|
500
|
|
|
$
|
1,786
|
|
|
958
|
|
|
$
|
13,569
|
|
|
Long-term debt (interest payments)
|
10,740
|
|
|
667
|
|
|
1,259
|
|
|
1,164
|
|
|
7,650
|
|
|||||
Total
|
$
|
27,553
|
|
|
$
|
1,167
|
|
|
$
|
3,045
|
|
|
$
|
2,122
|
|
|
$
|
21,219
|
|
|
Total Number of Shares Purchased 1
|
|
|
Average Price Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 2
|
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 2
|
|
||
August 3, 2019 - August 30, 2019 3
|
4,075,074
|
|
|
$
|
106.21
|
|
|
4,074,119
|
|
|
$
|
10,633,132,657
|
|
August 31, 2019 - October 4, 2019
|
1,722,158
|
|
|
111.55
|
|
|
1,518,990
|
|
|
10,464,045,888
|
|
||
October 5, 2019 - November 1, 2019 3
|
2,119,679
|
|
|
110.10
|
|
|
2,118,262
|
|
|
10,327,247,150
|
|
||
As of November 1, 2019
|
7,916,911
|
|
|
$
|
108.41
|
|
|
7,711,371
|
|
|
$
|
10,327,247,150
|
|
1
|
The total number of shares repurchased includes shares withheld from employees to satisfy either the exercise price of stock options or the statutory withholding tax liability upon the vesting of share-based awards.
|
2
|
On January 26, 2018, the Company’s Board of Directors authorized a $5.0 billion share repurchase program with no expiration, which was announced on the same day. On December 12, 2018, the Company’s Board of Directors authorized an additional $10.0 billion share repurchase program with no expiration, which was announced on the same day.
|
3
|
In August 2019, the Company entered into a variable notional Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase between $350 million and $500 million of the Company’s common stock. At inception, pursuant to the agreement, the Company paid $500 million to the financial institution and received an initial delivery of 2.8 million shares. In October, prior to the end of the third quarter, the Company finalized the transaction for $397 million and received an additional 0.8 million shares and a $103 million cash payment from the financial institution, which is equal to the difference between the $500 million payment made at inception and the final notional amount. The average price paid per share in settlement of the ASR agreement included in the table above was determined with reference to the volume-weighted average price of the Company’s common stock over the term of the ASR agreement. See Note 11 to the consolidated financial statements included herein for additional information regarding share repurchases.
|
|
|
LOWE’S COMPANIES, INC.
|
|
|
(Registrant)
|
|
|
|
December 3, 2019
|
|
By: /s/ David M. Denton
|
Date
|
|
David M. Denton
Executive Vice President, Chief Financial Officer
|
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